Minimum-wage hike in Oregon debuts Jan. 1

SALEM — Oregon's minimum wage, already among the nation's highest, will rise by 15 cents to $7.95 an hour beginning in January, Oregon Labor Commissioner Dan Gardner said Wednesday.

The increase follows passage of a 2002 ballot measure that ties the minimum wage to the Consumer Price Index, a measure of inflation. Oregon must recalculate the wage annually in September.

As a result, Oregon's minimum wage will be slightly behind California and Massachusetts' minimums of $8 an hour. The state of Washington's minimum wage of $7.93 also is linked to the cost of living and is expected to become the highest in the nation in 2008.

The increase will mean an extra $312 a year and a total annual income of $16,536 for a family with one full-time minimum wage worker, according to the Oregon Center for Public Policy, a Silverton-based think tank.

"While it is difficult to be excited by the creation of minimum-wage jobs that we know can't adequately support working families, at least the annual cost-of-living increases help low-wage working Oregonians from falling farther behind," said Michael Leachman, an analyst with the group.

Gardner, meanwhile, said states across the nation have raised their minimum wages in recent years and that even the federal government has raised the minimum wage to $5.85 an hour.

"Oregon's minimum wage law makes sure these workers' wages keep pace with the rising cost of living," the state labor chief said.

Oregon's law giving boosts in the minimum wage pegged to inflation hasn't been without controversy, however.

The restaurant industry, in particular, says the annual increases have put a damper on hiring of workers in that key sector of the state's economy.

"There aren't as many jobs as there could be," said Bill Perry of the Oregon Restaurant Association. He also said the automatic increases have the effect of raising the cost of day care, food and other services.

But the Center for Public Policy, which advocates for low-income workers, said the cost-of-living adjustments in the minimum wage "have not led to the dire consequences" predicted by the restaurant industry and other business interests that opposed the 2002 ballot measure.

Employment in the restaurant industry grew 19 percent during from 2002 to 2007, more than twice the growth in non-farm payroll jobs statewide during the same period, the group said.

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